European shares hit 3-week low before Italian vote

Record ID: 75232

  • Title: European shares hit 3-week low before Italian vote
  • Date: 2nd December 2016
  • Summary: FRANKFURT, GERMANY (DECEMBER 2, 2016) (REUTERS) VARIOUS OF FLOOR AT FRANKFURT STOCK EXCHANGE (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING (on ITALY REFERENDUM): "The Dax is scared of another euro zone crisis which could happen if Italy turns down Prime Minister Renzi's referendum. That would mean fresh elections and the opposition, which consists of euro critics, sees its opportunity. They will do everything they can to win and get Italy out of the euro zone. That's the scenario we are looking at here." BOARD SHOWING DAX LOSS OF 101.97 POINTS OR 0.96 PERCENT TRADER (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING (on ITALY REFERENDUM): "There is the famous danger of contagion. Should Italy be in trouble, for example because elections are required, there is a virus that could also affect other countries: Greece, Portugal, Spain and even France. Yields for government stocks are going up and bank risks are increasing again. There will be a renewed call on one institution to save everything: the ECB." TRADER ON PHONE (SOUNDBITE) (German) HEAD OF CAPITAL MARKETS ANALYSIS AT BAADER BANK, ROBERT HALVER, SAYING (on UBS): "Once Brexit happens, probably a hard Brexit which would mean all connections to Europe would be cut, a bank like UBS can no longer serve the European domestic market with financial services from London. So they will have to move to the continent, to Europe, to the remainder of the European Union. The best place to do that is Frankfurt, not just because I work here. All I can suggest is: everybody, come to Frankfurt. It can only mean good things for Frankfurt's position." TRADER WIDE OF DAX BOARD TOP SHOT OF FLOOR
  • Embargoed: 17th December 2016 11:35
  • Keywords: Germany Dax Italy referendum Renzi UBS London
  • Location: FRANKFURT, GERMANY
  • City: FRANKFURT, GERMANY
  • Country: Germany
  • Reuters ID: LVA0015B6UQMF
  • Aspect Ratio: 16:9
  • Story Text: European shares fell to a three-week low on Friday (December 2) as investors stayed cautious before a referendum in Italy that could trigger fresh political uncertainty in the region.
    The pan-European STOXX 600 index fell 1.2 percent, weighed down by weaker financial stocks and a pull-back in the commodity sector after oil prices fell from 16-month highs.
    "The Dax is scared of another euro zone crisis which could happen if Italy turns down Prime Minister Renzi's referendum," said Robert Halver, head of capital markets analysis at Baader bank in Frankfurt.
    "There is the famous danger of contagion. Should Italy be in trouble, for example because elections are required, there is a virus that could also affect other countries: Greece, Portugal, Spain and even France," Halver said.
    European equities have been underperforming Wall Street, which has surged to fresh record highs on expectations of fiscal stimulus under Donald Trump's administration.
    Some investors expect the trend to continue, as Europe faces a string of ballots over the next 12 months starting from Sunday, when Italians votes on Prime Minister Matteo Renzi's constitutional reform and Austrians elect their president.
    Halver also commented on Swiss bank UBS saying it had set up a bank in Frankfurt to consolidate the majority of its European wealth management operations, a move aimed at conserving capital and streamlining its structure.
    "Once Brexit happens, probably a hard Brexit which would mean all connections to Europe would be cut, a bank like UBS can no longer serve the European domestic market with financial services from London."
    "They will have to move to the continent, to Europe, to the remainder of the European Union. The best place to do that is Frankfurt," said Halver.
    The world's biggest wealth manager had already stated an attention to funnel the bulk of its European private banking business into one bank, UBS Europe SE, but had not determined where to house the headquarters.
    With neutral Switzerland outside of the European Union, Luxembourg was a contender, along with London until Britain's vote to leave the EU, but Frankfurt had long been viewed as the favourite.
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